Latest Indian Mutual Fund News | 12-July-2011

July 13, 2011

NEW FUND OFFER

1.Sundaram Fixed Term Plan-BO-BR files offer document with Sebi.

Sundaram Mutual Fund has filed offer document with Sebi to launch Sundaram Fixed Term Plan-BO-BR, a closed end income scheme. The New Fund Offer price is Rs 10 per unit. The objective of the Scheme would be to generate income with minimum volatility by investing in debt and money market securities, which mature on or before the maturity of the scheme.

News Source – NAV INDIA.

GENERAL

2.Sebi mulls scrapping annual fee sub-limits for MF sellers.

Looking for ways to incentivize mutual fund (MF) distributors, Sebi is mulling to do away with sublimits within the annual fees that asset management companies (AMCs) are allowed to charge from investors. Instead, the market regulator is weighing options of allowing a consolidated fee structure as per the limits already in place.

At present, fund houses are allowed to charge 2.5% annual fee for the first Rs 100 crore of equity assets they manage, and this comes down by 25 basis points (100 basis points = 1%) for every additional Rs 300 crore assets under management (AUM) with the lower limit capped at 1.75%. However, following Sebi’s stand of not charging investors more in any case, the overall limit for annual charges or expenses would remain the same, Sebi sources said.

News Source – ECONOMIC TIMES.

3.Gold ETFs shine in uncertain markets.

The uncertain market environment has brought good tidings for gold exchange-traded funds (ETFs) and short-term debt funds that invest in certificate of deposits, commercial paper and government securities. With the markets turning in a poor show in the first half of 2011, gold ETFs and short as well as ultra short-term funds have outperformed equity mutual funds (MFs) during the period. Only MFs that invest in FMCG stocks did better.